Update, 4:00 p.m.: Sunset Junction organizers have released a statement, posted in full at the end of this post. An excerpt: "Sunset Junction repeatedly asked for an itemization of city fees and once they were received, found that the fees were inflated more than 10 times that of comparable LA festivals. They also found that the fees for the police seemed to be questionably inflated... Sunset Junction has every intention of paying the city fees that it justifiably owes; the non-profit simply asks for a fair and just accounting that is comparable to other citywide events."

A permit for this weekend's Sunset Junction Music Festival was denied for the second time this week, likely canceling the event for the first time since it began 31 years ago. At issue was unpaid permit fees for this and last year's event, totaling nearly $400,000.

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Festival organizers said they raised enough money over the last two days to cover fees for this weekend's event, but did not have the $141,000 on hand. Instead, a bank faxed an account ledger during the middle of today's Board of Public Works meeting that showed there was enough money, but some recent deposits had yet to clear. A lawyer for the festival said a check could be delivered on Thursday, one day after today's deadline set by the board during its meeting on Monday.

"This is a remarkable disappoint," said board president Andrea Alarcón. "We've given you opportunity after opportunity after opportunity to come clean, to make it right. This is far short to making it right."

Festival organizers dispute the $267,000 bill for the 2010 festival, specifically over police services, but the city has stood by its fees.

Sunset Junction began in 1980 as a way to ease tension between gangs and the gay community in Silver Lake. Run by a nonprofit, the once-free neighborhood event has turned into a commercial-like affair, garnering major headliners and a $25 door entrance fee each day (cheaper prices if bought earlier online), all which has worn down community relations. Head organizer Michael McKinley testified on Monday that the event supports community beautification and programs like a soccer league that benefit at-risk youth. The event and its 11 months of planning is a jobs training program in itself, he explained.

"It seems to be that the event has outgrown the support of the community and outgrown the support of the council office," said board member Valerie Lynne Shaw, the sole dissenter on Monday, but who voted against the permits today.

One city representative told KCET a denial meant the festival was probably canceled, but wondered about the possibility of a swift legal action.

STATEMENT FROM SUNSET JUNCTION REGARDING TODAY'S DECISION BY THE BOARD OF PUBLIC WORKS

The requested city fees of $142,000 for the 2011 Sunset Junction Fair were secured from Live Nation ($100k) along with supporters, who stepped up on behalf of Sunset Junction in respect of their 31-year history. Sunset Junction legal was told by the Board of Public Works hearing on Monday, August 22 that they may re-consider issuing permits if Sunset Junction could provide them with this year's fees in advance, totaling $142,000 by Wednesday, August 24 at 12 noon. The majority in attendance on August 22 were in support of Sunset Junction.

Live Nation deeply understands the importance, the legacy and the great impact the fair has on the majority of the community, along with the artistic community. The funds did arrive yesterday from Live Nation, however not in time for Sunset Junction organizer Micheal McKinley to deposit in the bank. The funds were deposited in the bank this morning (8/24) with a faxed receipt of proof sent over to the Board of Public Works. This is disputed in the media. Below is contact information of Greg Terlizzi from Live Nation to verify that funds were provided.

Last year, one week prior to the 2010 Sunset Junction Fair, organizers were presented with a bill for $267,000 from the city. In prior years, these fees did not exist for the non-profit organization, which utilizes Sunset Junction as a fundraiser to help at risk youth embrace a better life choice. Sunset Junction repeatedly asked for an itemization of city fees and once they were received, found that the fees were inflated more than 10 times that of comparable LA festivals. They also found that the fees for the police seemed to be questionably inflated. This point was also brought up at Monday's hearing and addressed by Commissioner Valerie Lynne Shaw. The official answer by a police representative when asked about the discrepancy in charges from one year to the next, was there "was a change in policy".

Sunset Junction has every intention of paying the city fees that it justifiably owes; the non-profit simply asks for a fair and just accounting that is comparable to other citywide events.

Sunset Junction was fortunate and grateful to have Live Nation step-up to support them at the 11th hour. This is not a regular occurrence during these harsh economic times and prior years of recession, and therefore Sunset Junction should not be faulted for not being able to previously deliver funds. It is a testament to Live Nation for having the passion, heart and soul to save the special magic of Sunset Junction for all the fans, the community, the artistic community, the at risk youth and everyone else here who loses as a result.

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